Contracting ignorance isn’t bliss By E.A Cooke and A.J. Davison When contractors are hired to do a particular job on a project, and an owner or a design professional has set specific parameters for that job, contractors have to be aware there’s a risk that simply following instructions may expose them to legal liability. In other words, a contractor cannot build a faulty or non-code compliant structure, even if they’re struggling to meet a difficult budget or simply following professionally prepared design drawings. In late 2009, the Supreme Court of British Columbia released a decision in the case of Madalena v. Kuun, which found a contractor liable for faulty design and construction of a residence on Vancouver Island. The owner was a close friend of the contractor, and had set a very strict budget for the construction of her home. The home was designed and built with no written contract, and with the contractor doing both the design work and acting as general contractor. Within a year of the home’s completion in 1998, it was showing evidence of serious water ingress, resulting from the use of a face-sealed stucco design. When the homeowner sued, the contractor argued he had been handcuffed by a very limited budget, and had done the best he could with the budget available. The contractor argued that the owner should have known that, by building the house so cheaply, she was accepting a higher level of risk of design and construction defects. The Court rejected that defense, and found the contractor liable for most of the repair cost, after deciding the home failed to meet the requirements of applicable building codes, guidelines and good trade practice. What the Court was really getting at was “fitness for purpose.” The Madalena case confirms contractors who enter into unwritten construction agreements may be found liable where the finished product isn’t “fit for purpose,” whether or not such a specific term is discussed between the parties. Since the home did not keep out water or mold, and the resulting damage required significant and immediate repair, the Court found the home was unfit for its intended purpose, i.e. habitation. While it may be obvious to some that a contractor can be found liable for designing and building a non-code compliant house, despite working within an unrealistic budget, contractors should also be aware that they can be held liable for following the faulty design plans of design professionals. The Supreme Court of Canada decided in 1974 that a general contractor who had built a home in accordance with plans provided by an architect was liable for damages along with the architect where the design was negligent (Brunswick Construction Ltee v. Nowlan). In that case, an owner hired an architect to design a house, and later hired a contractor to build the house using the architect’s plans. The architect was not involved in the construction phase of the project. The Court decided that the experienced contractor should have known the architect’s design was bad and that the house would eventually suffer water damage. The Court found the contractor had a legal duty to warn the owner that the architect’s design was faulty, and to advise the owner about the specific design problems. Because the contractor built the house in compliance with the design professional’s flawed plans and specifications, the contractor was as liable as the architect for damages. Similar to the Madalena case, even though the contract didn’t contain a written “fitness for purpose” clause, the contractor was still exposed to significant damages suffered due to the home being “unfit.” The take-away message from these cases is: regardless of the limited budget provided by the owner or the instructions given, a contractor can still be held liable for building something that doesn’t meet applicable codes and trade practices or that doesn’t reasonably meet the unspoken purpose for which it is being built. Contractors must, at all times, be alert to good construction practices and code-compliance, even where a design professional or an owner has forgotten or ignored them. However, there’s no expectation that contractors must critique design plans with the same expertise as an architect or engineer. There is simply a legal requirement that contractors remain alert to problems that should be obvious to people with construction industry experience. Owners hire contractors for this experience, and contractors cannot wear blinders and ignore clear problems that are technically outside their scope of work. CC E.A. Cooke, LLB and A.J. Davison, LLB, are lawyers with the law firm Borden Ladner Gervais LLP (Vancouver Office). This column originally appeared in On Site magazine. | 
